The Wisconsin Court of Appeals upheld a sales tax assessment against StubHub for the sale of tickets made through StubHub’s online marketplace. Between 2008 and 2013, more than $150 million tickets sales occurred between ticketholders and ticket buyers on StubHub’s platform for events that took place in Wisconsin. StubHub earned revenue from listing fees and commissions when a ticket sold through the platform. The Wisconsin appellate court determined that StubHub was a “seller” subject to sales tax because StubHub “effected the actual transfer” of the tickets sold on its website in exchange for payment. The court also rejected StubHub’s argument that a 2019 amendment to Wisconsin’s sale tax statute to specifically subject “marketplace provider” and “marketplace seller” to the tax meant StubHub was not subject to tax under the prior law because the court found the amendment merely clarified the law to end ongoing controversy and noncompliance.
Additionally, Court of Appeals upheld the imposition of a 25% negligence penalty on StubHub for failure to file and pay the sales tax. Specifically, the court looked to a Wisconsin Tax Bulletin from 2011 that provided guidance on how the sales and use tax applied to admissions, including an example on online “ticket brokers.” The court concluded that StubHub’s decision to ignore the guidance amounted to willful neglect.